LAUSR

Energy consumption supports the basic needs of society. The way energy is produced matters for the global economy and environmental quality. The present study explores the impact of biomass energy consumption on environmental quality across heterogeneous income groups over the period 1971–2018. The cointegration is analyzed through the Wester-Lund cointegration test. The study used Fully Modified (FMOLS) and Dynamic Ordinary Least Squares (DOLS) to examine the long-run relationship between biomass energy and environmental quality in the presence of economic growth, urbanization, natural resource, and globalization. The results validate the potential of biomass energy consumption for emission reduction in the high-income group while environmental deteriorating role in upper-middle-income, lower-middle-income, and low-income groups. Our empirical findings support an inverted U-shaped relationship in the high-income and upper-middle-income groups while a U-shaped relationship between income and environmental quality exists in lower-middle-income and low-income groups. Globalization improves environmental quality in high-income and upper-middle-income groups while resulting in higher emissions in lower-middle, and low-income economies. Natural resource rent degrades the environment in high-income economies while lowering emissions in upper-middle, lower, and low-income economies. The results from Pooled Mean group and Driscoll Kray estimation also support these findings.